Ellis Winningham has posted the article Deficits Matter, Paul Krugman Doesn’t.
In his latest anti-knowledge drivel of January 9, 2017, Count Krugula apparently decided that he wants to make a total fool of himself in public yet again. Only this time, he wants it to be a sort of career-ending effort. As I said, in that effort, Paul Krugman has succeeded.
MarianneB brought this article to my attention. She wanted my opinion because I tend to read and understand articles like this one.
I have read varying amounts of the critique and the article to which it refers. The critic is closer to the truth than Krugman, but they both tend to gloss over subtleties.
Deficits do and don’t matter in ways too subtle for either of them to cover. The money the FED put out there is sitting in the hands of people who won’t put it into the economy right now. To make deficits work, the money has to be put in the right hands to match the circumstances. What the fed has done to get it into the wrong hands might need retraction if we start getting money into the right hands. Winningham glosses over the potential problem.
I am being too subtle too. When I use phrases such as “right now” and “match the circumstances”, you are supposed to understand that in other times other than “right now” things could (and will) be different. I can leave it to your imagination as to what could be different, but that would be a deriliction of the duty of an expert. The chances that the uninitiated would guess the differences that would change the economic prescription are not that great. Neither writer helps with that matter. This essay would be way longer than it is, if I were to go into the explanation, but at least I have warned you that there are holes in the arguments if these details are not discussed.